1. This appeal pertains to the admissibility of Modvat credit on Explosives, Grinding Media, Cylpebs, Acetylene Gas, Oxygen Gas, Refractories (Fire Bricks), Steel Castings, Ball Bearings, Cables, Batteries, Electric Insulated Wires, Electrodes, .Refractory Cement, Rubber and Articles thereof, HDPE bags.
2. The facts of the case are that the appellants are engaged in the manufacture of cement. They procured a number of inputs and claimed Mod-vat credit of duty paid on the inputs under the Modvat scheme. The department alleged that the Modvat credit on the items mentioned in the preceding paragraph was not admissible to the appellants on various grounds. Against that denial of Modvat credit the appellants have filed the present appeal before us.
3. Shri Sanjay Grover, learned Advocate arguing the appeal analyses the admissibility or otherwise on each item. He submits that in so far as explosives are they are covered by the decisions of the Tribunal in the case of Associated Cement Co. Ltd. 1991 (55) E.L.T. 415 as also by the decision of the Tribunal in the case of Indian Rayon and Industries Limited 1995 (76) E.L.T. 358. He submits that these decisions cover the case in their favour holding that the Modvat credit was admissible on Explosives used in quarrying (blasting) limestone.
4. On Grinding Media and Sylpebs, learned Counsel submits that Grinding Media are Steel Balls which are used for grinding of limestone and coal. Cylpebs are used for the same purpose as Grinding Media are used.
He submits that admissibility of Modvat credit on Grinding Media and Cylpebs is covered by the decision of the Tribunal in the case of Indian Rayon and Industries Limited. He submits that the ratio of this decision squarely covered their case.
5. On Acetylene Gas and Oxygen Gas, he submits that they are used for welding the machine, etc. He submits that he is not able to lay his hand on any decision of this Tribunal to show that the Modvat credit was admissible on these two Gases used in the plant for welding purposes. In his fairness, he, however, submits that the Tribunal in the case of Heavy Engineering Corporation Ltd. 1990 (49) E.L.T. 531 had held that the Modvat credit on Acetylene Gas and Oxygen Gas was not admissible if used otherwise than for cutting runners and risers in the castings.
6. On the Refractories (Fibre Bricks), the learned Counsel submits that admissibility of Modvat credit on these items is squarely covered in their favour by the decision of this Tribunal in the case of Hindalco Industries Limited 1996 (88) E.L.T. 519.
7. On the question of admissibility of Modvat credit on Steel Castings, learned Counsel submits that Steel Castings are part of the grinding machine for grinding cement. He submits that they are not independent machines, plants, equipments, apparatus, etc. He submits that they did not have any prime movers to act by themselves and therefore they can at best be treated as part of the machine. He submits that admissibility of Modvat credit on parts of machine is covered in their favour by the decision of this Tribunal in the case of Union Carbide India Limited 1996 (86) E.L.T. 613. The ld. Counsel submits that these Steel Castings are in the nature of lining material of the cement manufacturing machine and can be compared to the use of lining material in the electric arc furnace whereas Refractory Bricks are used for lining the machine. He submits that in this view of the matter they will be fully covered by the decision of the Tribunal in the case which is in their favour in the case of Hindalco Industries Limited.
8. On the question of Ball Bearings, learned Counsel submits that Ball Bearing was nothing but part of the machine. He submits that the part of the machine do not come in the excluded category under Rule 57A as held by this Tribunal in the case of Union Carbide India Limited 1996 (86) E.L.T. 613.
9. In so far as Cables, Batteries and Electric Insulated Wires are concerned, the learned Counsel fairly concedes that they are capital goods and therefore did not argue on this issue.
10. On the question of admissibility of Modvat credit on electrodes, the learned Counsel submits that they are used in the electric arc furnace. He submits that the use of Electrodes and admissibility of Modvat credit on the use of these Electrodes is covered by the decision of this Tribunal in the case of Modi Alkalies and Chemicals Limited 1994 (74) E.L.T. 966. He submits that the Tribunal in the case of Hindalco Industries Limited had held that the Modvat credit was admissible on refractory cement. He submits that the ratio of this decision covers their case.
11. On Rubber and Articles thereof, the learned Counsel submits that they are nothing but part of the machine. He submits that even if they are treated as used in the conveyor system they do not perform a complete function and hence even in that respect they are only part of the conveyor system.
12. In so far as HDPE bags are concerned, the learned Counsel submits that the Modvat credit on HDPE bags pertains to the period from 14th June, 1990 to 16th September, 1990. He submits that admissibility of Modvat credit is covered by the decision of this Tribunal in the case of Orissa Cement Limited 1994 (69) E.L.T. 537. He submits that their case is squarely covered by the ratio of the decision of this Tribunal in this case.
13. Summing up his argument, learned Counsel submits that in view of the above submissions the appeal may be allowed.
14. Shri Y.R. Kilanyia, learned JDR appearing for the Commissioner submits that the department had filed Cross Objections. However a copy of Cross Objection was neither available with the appellants nor was available in the records of the Tribunal. However the learned JDR was allowed to go through the Cross Objections filed by the department. We find that the Cross Objections were nothing but comments on certain aspects. The ld. JDR submits that in so far as explosives are concerned they are not used inside licensed/registered premises of the factory and therefore cannot be treated as inputs used in or in relation to the manufacture of cement.
15. On the question of Grinding Media and Cylpebs, learned JDR submits that they are machines and since the machines fall under the excluded category under Rule 57A, therefore no Modvat credit is admissible on these items.
16. In so far as Refractories (Fire Bricks) are concerned, the ld. JDR submits that they are constructional materials and therefore were not either machines or used in or in relation to the manufacture of cement.
17. Reiterating the findings of the lower authorities, learned JDR submits that the Modvat credit has rightly been denied to the appellants by the lower authorities.
18. Heard the submissions of both sides. We find that the learned Counsel for the appellants has supported every one of his argument by the decision of the Tribunal. Without repeating the same we hold that in view of the submissions and in view of the facts supported by the decisions of the Tribunal, the Modvat credit will be admissible on Explosives, Grinding Media, Cylpebs, Refractories (Fire Bricks), Steel Castings, Ball Bearings, Electrodes, Refractory Cement, Rubber and Articles thereof and HDPE bags.
19. In so far as admissibility of Modvat credit on Acetylene Gas, Oxygen Gas, Cables, Batteries, Electric Insulated Wires is concerned, we find that there is sufficient evidence on record to show that they cannot be treated as inputs used in or in relation to the manufacture of cement and hence on these items the lower authorities have rightly denied the benefit of Modvat credit of duty on these items under the Modvat scheme.
20. In the result the impugned order is modified to the extent stated above and the appeal is disposed of in the above terms. Consequential relief, if any shall be admissible to the appellants in accordance with law.